The Council for Adult and Experiential Learning (CAEL) provides, among other services, program management for employee tuition assistance programs for some of the largest companies in the world (1). It was exciting to be invited to present the results of the Corporate University Xchange study, Tuition Reimbursement: Changes on the Way?, at the recent CAEL Tuition Strategy Forum held November 7th in San Francisco.

The conversation was a spirited one, and it was clear that companies at that forum are looking for ways to assure that the money spent on tuition reimbursement has an impact on the company’s business strategy. Yet, some of the information presented from the CorpU survey showed that the companies that participated in the CorpU survey were clearly not thinking the same way. As Figure 1 shows, many of them are not considering measuring or reporting on the impact of their programs:

Figure 1. Only 20 percent of respondents currently measure impact of tuition reimbursement programs, and almost half of respondents have no plans to do so.

There are changes planned that will make the process more strategic – especially in the integration of Individual Development Plans that 26 percent of companies plan to add (Figure 2).

Figure 2. Companies are planning to be more generous, and also more strategic by integrating Tuition Reimbursement with Individual Development Plans and even, for 16 percent of respondents, with L&D.

Global Strategies
Tuition reimbursement in global companies was the subject of a panel discussion at the CAEL Forum. Participants agreed that tuition reimbursement is still a differentiator for companies outside the United States, since unlike at U.S.-based firms, not all companies offer them. One challenge is how to find the schools that meet your needs, and there most participants relied on local resources. One representative from a major manufacturing company suggested that working with the Ministries of Education helps them to find accredited programs in the right subject areas, and they pay close attention to what is actually being approved on a detailed country by country level.

Another global strategy is to look where the company gets its people. Those institutions that are resources for hiring are likely to have programs suitable for support. Another option is to look at those institutions that a company partners with for research and development, or where their customers have ties. Even globally, there has to be some management of expectations around the attainment of college degrees; they can’t be seen as automatic entries to promotions or new job roles.

The Value of the Benefit
CAEL and Bellevue University’s Human Capital Lab (2) collaborated on a project to quantify the investment involved in supporting an individual as they went through a degree program. Using data from 27 companies representing 124,000 courses for Associate’s, Bachelor’s, Executive MBA, Master’s and Doctorate’s degrees, they found that the average price per credit hour for all degree programs is over $400. This varied with degree program, which is not surprising, but also varied by course of study, with Finance the most expensive at nearly $600 and Liberal Arts and General Studies closer to $200.

More important, however, is what these numbers mean when it comes to the cost of a degree. According to the study, an Associate’s degree will cost the company about $16,000, while a Bachelor’s degree comes out to $45,000.

Bellevue University’s Human Capital Lab’s Director, Mike Echols, took the CAEL data (which included the fact that 46 percent of degrees were in business) and data about the lack of growth in the age cohort that follows the baby boomer generation, discussing the critical question about how much it’s worth to train and retain good people. Verizon does that calculation, and has found that overall attrition is 19 percent while it’s only 8 percent for tuition reimbursement participants. That alone saves enough money to give tuition reimbursement a greater than 100 percent ROI.

A Clear Direction
What was obvious to all who participated was that tuition assistance programs are a key and critical aspect of talent management, but they have to be transformed from a checkmark benefit for new employees into a vital part of the learning and development of valued employees.

(1) http://www.cael.org/
(2) http://www.humancapitallab.org/about.aspx

Click here to download the slide deck from the February 28, 2008 Tuition Reimbursement webinar.